I have been a scientist in the field of the earth and environmental sciences for 33 years, specializing in geologic disposal of nuclear waste, energy-related research, planetary surface processes, subsurface transport and environmental clean-up of heavy metals. I am a Trustee of the Herbert M. Parker Foundation and consult on strategic planning for the DOE, EPA/State environmental agencies, and industry including companies that own nuclear, hydro, wind farms, large solar arrays, coal and gas plants. I also consult for EPA/State environmental agencies and industry on clean-up of heavy metals from soil and water. For over 20 years I have been a member of Sierra Club, Greenpeace, the NRDC, the Environmental Defense Fund and many others, as well as professional societies including the America Nuclear Society, the American Chemical Society and the American Association of Petroleum Geologists.

The Direct Costs of Energy: Why Solar Will Continue To Lag Hydro And Nukes

Wrapping up our discussion on the actual costs to produce electricity, we can determine a total actual life-cycle cost for coal, nuclear, solar and hydro needed to build and operate the number of each plants or arrays required to produce a trillion kWhrs over their life-span. Key assumptions and references are given in the three previous posts.

In 2011, a 750 MW coal fired power plant cost $2.5 billion, expected to operate at a capacity factor of 71% for the 8,766 hours each year over its 40-year life, producing 187 billion kWhrs, more or less.

Fuel costs are largest for natural gas and coal, small for nuclear and zero for the renewables. Long-term generating costs are highly dependent upon fuel costs, especially for natural gas.

To produce one trillion kWhrs over their life span will require building about 5 (5.3) of them at a cost of about $13.4 billion. Fuel costs are about 2¢/kWhr @$40/ton of coal, O&M costs are about 0.6¢/kWhr and decommissioning costs are 0.21¢/kWhr. So to produce a trillion kWhrs from coal will cost: $13.3 billion + $20 billion + $6 billion + $2.1 billion = $41.4 billion or 4.1¢/kWhr.

This year, the Westinghouse AP1000, a 1,000 MW nuclear power plant, costs $7 billion, operating at a capacity factor of 90% for the 8,766 hours each year over its 60-year life, and will produce 473 billion kWhrs, more or less.

To produce one trillion kWhrs over their life span will require building about 2 (2.1) of them at a cost of about $14.8 billion. Fuel costs are about 0.6¢/kWhr for nuclear @$100/lbU3O8, O&M costs are about 1.3¢/kWhr and decommissioning costs are 0.11¢/kWhr (if put in the right geology, i.e., massive salt). So to produce a trillion kWhrs from nuclear will cost: $14.8 billion + $6 billion + $13 billion + $1.1 billion = $34.9 billion or 3.5¢/kWhr.

NRG Energy is installing a 92 MW solar array costing $300 million, operating at a capacity factor of 20% for the 8,766 hours each year over its 25-year life, and will produce 4 billion kWhrs, more or less.

92 MW x 1000 kW/MW x 0.20 x 8,766 hrs/yr x 25 yrs = 4.0 billion kWhrs

To produce one trillion kWhrs over their life span will require building 250 of them at a cost of about $75 billion, the most expensive build of any source. But all other costs are the lowest of any source – fuel costs are zero, O&M costs are only about 0.1¢/kWhr and decommissioning costs are only 0.08¢/kWhr. So to produce a trillion kWhrs from solar will cost: $75 billion + $0 billion + $1 billion + $0.8 billion = $76.8 billion or 7.7¢/kWhr. Most anticipate that this cost will come down as newer technologies are implemented, such as HPG cells and concentrated solar (see David Ferris‘s post on the left), and the capacity factor increases substantially.

Finally, The Alaska Energy Authority has been authorized by the State to build a 600 MW hydroelectric plant on the Susitna River which will cost about $3 billion and operate at a capacity factor of 44% for the 8,766 hours each year over its 80-year expected life, producing 185 billion kWhrs, more or less.

To produce one trillion kWhrs over their life span will require building five and a half of them (5.4) at a cost of about $16.2 billion. Fuel costs are zero, O&M costs are 0.8¢/kWhr and decommissioning costs are 0.86¢/kWhr (the highest decom cost of any source). So to produce a trillion kWhrs from hydro will cost: $16.2 billion + $0 billion + $8 billion + $8.6 billion = $32.8 billion or 3.3¢/kWhr, the cheapest of all sources.

As discussed previously, the longer fossil fuel plants operate, the less cost effective they become, but the longer nuclear, hydro and renewables operate, the more cost effective they become, because it is all about the fuel. So the final ranking of energy sources on actual costs to produce a trillion kWhrs over their lifespan is 3.3¢/kWhr for hydro, 3.5 ¢/kWhr for nuclear, 3.7 ¢/kWhr for natural gas @ $2.60/mcf, 4.1 ¢/kWhr for coal, 4.3 ¢/kWhr for wind, 5.1 ¢/kWhr for natural gas @ 4/mcf, and 7.7 ¢/kWhr for solar. Again, these costs do not include connecting to the grid or buffering of the intermittency of renewables to prevent grid crisis. When ranked like this, the differences between hydro, nuclear, wind, coal and gas @ $2.60/mcf are pretty minor in the long-term and other issues like capital investment, emission goals, distribution and energy security should be deciding the mix we aim for by mid-century. But anticipated rising fossil fuel costs, even for natural gas, over the coming decades will change this ranking.

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George, construction of solar (semiconductor manufacturing chemistry and highly energy intensive for PV panels) and wind (require heavy elements for generator magnets, for which the only proven profitable mine in the US is closed due to environmental regulations)rely on natural resources. Nuclear has the smallest environmental footprint and has costs that create the most domestic jobs. If you really want to help our economy, the environment and reduce dependence on foreign sources of fossile fuels, go nuclear. Excess electrical energy from the plants (produced at off-peak hours) can be used to generate hydrogen — which would be used in automobiles. This energy generation process would continue the centuries-old process of reducing carbon from the energy production process (cellulose to coal to oil to natural gas to hydrogen).

Patriot Coal on July 9, 2012 filed for Chapter 11 bankruptcy protection. This is a direct result of EPA rules and regulations.

Last week the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago. This because some 45 coal fired electricity producing plants have been closed by EPA. More are scheduled for closing in 2012 (160 or so)…the pace is accelerating.

It’s the result of an unprecedented regulatory assault on coal that will leave us all much poorer.

Last week PJM Interconnection, the company that operates the electric grid for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) held its 2015 capacity auction. These are the first real, market prices that take Obama’s most recent anti-coal regulations into account, and they prove that he is keeping his 2008 campaign promise to make electricity prices “necessarily skyrocket.”

Some facts: 1)Wind was 17 times higher than the cost of nuclear power 2)Wind was 5 times higher than the cost of coal power 3)Solar was 31 times higher than the cost of nuclear power 4)Solar was 9 times higher than the cost of coal power As of 3/29/2011 Nuclear power generated 13.5% of all world electricity and solar a mere 0.6%.

The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt.

Why the massive price increases? Andy Ott from PJM stated the obvious: “Capacity prices were higher than last year’s because of retirements of existing coal-fired generation resulting largely from environmental regulations which go into effect in 2015.” Northern Ohio is suffering from more forced coal-plant retirements than the rest of the region, hence the even higher price.

Excessive Rules and regulations have caused these price increases unecessarily, here’s proof: The two biggest winners look to be Canada and the United States. Canada, with something like two trillion barrels worth of conventional oil in its tar sands, and the United States with about a trillion barrels of shale oil, are the planet’s new super giant energy powers. Throw in natural gas and coal, and the United States is better supplied with fossil fuels than any other country on earth. Canada and the United States are each richer in oil than Iraq, Iran and Saudi Arabia combined.

Further bolstering America’s new geopolitical edge, the rest of the western hemisphere is also rich in oil. Venezuela is now believed to have more oil that Saudi Arabia, and Brazil’s offshore discoveries make it a significant factor in world oil markets as well.

China is another winner, though on a smaller scale. China has the second largest shale oil reserves in the world, estimated at about half the size of America’s. This puts China in the Saudi class as well, but given the anticipated growth in China’s economy, its shale oil wealth will reduce but not end its need for energy imports.

The other important change in the new world energy picture is one I wrote about earlier this week: Israel’s potential emergence as a major oil and gas producer. With trillions of cubic feet of natural gas, and potentially as much as 250 billion barrels of recoverable shale oil, Israel may be on the verge of joining the wealthiest Arab states as a world class energy producer.

USA is self sufficient 9 ways to Sunday is all energy needs. In order for America to Excell the basic formula that made America great, i.e., Cheap energy + manufacturing = American Excellence. Disband the EPA. Repeal every rule and regulation EPA has issued and the USA will lead the world in energy production. God Save America. Amen.

Yes, the cost of wind and solar are too high to replace coal, and we have failed to ramp up nuclear because of fear. Gas is the big winner, although it is no better with respect to global warming than coal, and even a bit worse (see my post of 7/15). There are ways to do all of this better but we don’t seem to be keen on the long-term planning and commitment it takes to do this right, and that made America pretty great in the 20th century. Short-term profits are what drives us now, and that will definitely not keep us at the top.

Thank you very much for the lucid way you explained the cost factor for various modes of power. Solar power has not been in the market long enough to assign an over all expected life of 25 years. It was not clear how you assumed 25 years

These calculations may undergo drastic change, if coal power stations have to comply with the EPA requirement to capture carbon dioxide. Is there a cost effective technology which will ensure compliance with EPA requirements?

Do you expect humongous cost reductions in producing photvoltaic panels?

Good question, sorry it took me so long to see your comment. Yes, the 25 years for solar is just a guess based on industry claims and may be very generous. Indeed, one reason why there has not been a carbon standard is that it will be so costly. There are no effective technologies yet, and even the ones like chilled ammonia at best only double the cost of electricity. Also, modeling of deep geologic sequestration, such as pumping CO2 into salt deposits and deep brines, have shown to increase earthquake activity, so there is no good solution yet.

the solar industry predicts large cost reductions in manufacturing in the next ten years based on new materials like germanium and new manufacturing techniques so I expect there to be major cost reductions. However they would have to be monumental to get the generation costs down to the level of fossil fuel or nuclear generation.

Dear Rainer, sorry I took so long to notice this (I am relatively new at this!). My blogs can be seen at http://blogs.forbes.com/jamesconca/ just scroll down and back pages to find older ones. Thanks – Jim

Dear James, thanks for your reply. However, first finding the list of your posts and then finding the correct articles within the list would be quite cumbersome. The sentence “Key assumptions and references are given in the three previous posts” does not even give a clue to the reader what to look for.

Thus my suggestion to include a list of the titles of the four blog posts belonging together in each of them. And if you have the titles already, you could as well shape them as links (should be possible just as any other external link) to let the reader switch back and forth easily.

Your posts are valuable, and it would be a pity if people don’t read them just because they cannot click through to associated ones. Thanks for consideration.